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Financial Release

08/04/16

Total Contract Value up 13% YoY FX Neutral to $1.75 Billion

Total Revenue Increased 12% YoY FX Neutral to $610 Million

GAAP Diluted EPS was $0.57 Per Share

STAMFORD, Conn.--(BUSINESS WIRE)--Aug. 4, 2016--
Gartner, Inc. (NYSE:IT), the leading provider of research and analysis
on the global information technology industry, today reported results
for second quarter 2016. The Company updated its GAAP EPS guidance
following its recently announced acquisition, and reiterated the
remainder of its previously announced financial outlook for full year
2016.

For second quarter 2016, total revenue was $610.0 million, an increase
of 11% over second quarter 2015. Excluding the impact of foreign
exchange, quarterly revenues increased 12%. Second quarter 2016 net
income was $47.9 million, a decrease of 6% compared to second quarter
2015. Normalized EBITDA was $117.7 million for second quarter 2016, an
increase of 7% over second quarter 2015 on a reported basis and 5%
adjusted for foreign exchange impact. Diluted Earnings Per Share was
$0.57 in second quarter 2016 compared to $0.61 in second quarter 2015.
Diluted Earnings Per Share Excluding Acquisition Adjustments was $0.71
in second quarter 2016 compared to $0.65 in second quarter 2015. (See
“Non-GAAP Financial Measures” below for definitions of Normalized EBITDA
and Diluted Earnings Per Share Excluding Acquisition Adjustments).

For the six months ended June 30, 2016, total revenue was $1.17 billion,
an increase of 15% over the same period in 2015 and 16% adjusted for the
foreign exchange impact. Net income was $88.1 million while Normalized
EBITDA was $221.0 million. Diluted earnings per share for the six month
periods was $1.05 in 2016 compared to $0.92 in 2015. Diluted Earnings
Per Share Excluding Acquisition Adjustments was $1.32 per share and
$1.02 per share for the six months ended June 30, 2016 and 2015,
respectively.

Gene Hall, Gartner’s chief executive officer, commented, “We are well on
track to deliver another year of double-digit growth in contract value,
revenue and earnings, coupled with strong cash flow conversion. We
consistently deliver tremendous value to our clients which results in
long-term growth in cash flow and earnings to our shareholders.”

Business Segment Highlights

Research

Revenue for second quarter 2016 was $449.2 million, up 16% compared to
second quarter 2015. Research revenues increased 17% in the second
quarter of 2016 excluding the foreign exchange impact. The quarterly
gross contribution margin was 70% in both the second quarter of 2016 and
2015. At June 30, 2016, total contract value was $1.75 billion, an
increase of 9% on a reported basis and 13% on a foreign exchange neutral
basis compared to June 30, 2015. Second quarter 2016 and 2015 client
retention was 83% and 85%, respectively, while wallet retention was 104%
in the 2016 quarter and 106% in the 2015 quarter.

Consulting

Revenue for second quarter 2016 was $94.1 million, an increase of 6%
compared to second quarter 2015 on both a reported basis and excluding
the foreign exchange impact. The gross contribution margin was 35% and
38% in the second quarter 2016 and 2015, respectively. Utilization was
69% and 68% in second quarter of 2016 and 2015, respectively. As of June
30, 2016, billable headcount was 626 compared to 564 as of June 30,
2015. Backlog was $108.6 million compared to $97.4 million at June 30,
2015.

Events

Revenue for second quarter 2016 was $66.8 million compared to $73.9
million in second quarter 2015, a decrease of 10% on both a reported
basis and excluding the foreign exchange impact. The revenue decrease
was due to changes in our events calendar. Revenue increased 16% in
second quarter of 2016 from the events that were held in both second
quarter of 2016 and 2015. The gross contribution margin was 54% in
second quarter 2016 compared to 53% in the prior year quarter. The
Company held 25 events with 15,451 attendees in second quarter 2016,
compared to 26 events and 17,107 attendees in second quarter 2015.

Cash Flow and Balance Sheet Highlights

Gartner generated $153.3 million of operating cash flow in the first
half of 2016 compared to $149.4 million in the first half of 2015. Free
Cash Flow was $139.8 million and $136.2 million in the first half of
2016 and 2015, respectively. (See “Non-GAAP Financial Measures” below
for a definition of Free Cash Flow). During the first half of 2016, the
Company paid $52.0 million in cash to repurchase its common shares and
$28.9 million for the acquisition in June of SCM World, a London-based
firm that provides subscription-based research and conferences for
supply chain executives. The Company also paid $25.3 million in cash for
capital expenditures and $11.9 million for acquisition and integration
payments.

In June 2016, the Company entered into a new secured credit arrangement
to take advantage of favorable financing conditions and to obtain
greater flexibility through a larger revolving credit facility. The new
arrangement provides for a five-year $600.0 million term loan and $1.2
billion revolving credit facility. The Company had $830.0 million
outstanding under the new arrangement as of June 30, 2016. As of June
30, 2016, the Company had $445.1 million of cash and $966.0 million of
borrowing capacity under its new revolving credit facility.

Financial Outlook for 2016

The Company's financial outlook for 2016 is provided below. The Company
updated its GAAP EPS guidance following its recently announced
acquisition, and reiterated the remainder of its previously announced
financial outlook:

Gartner has scheduled a conference call at 8:30 a.m. eastern time on
Thursday, August 4, 2016 to discuss the Company’s financial results. The
conference call will be available via the Internet by accessing the
Company’s website at http://investor.gartner.com
or by dial-in. The U.S. dial-in number is 888-713-4209 and the
international dial-in number is 617-213-4863 and the participant
passcode is 29305561#. The question and answer session of the conference
call will be open to investors and analysts only. A replay of the
webcast will be available for approximately 30 days following the call
on the Company's website. In addition, a transcript of the call will
also be available on the Company's website shortly after the conclusion
of the call.

About Gartner

Gartner, Inc. (NYSE: IT) is the world’s leading information technology
research and advisory company. Gartner delivers the technology-related
insight necessary for our clients to make the right decisions, every
day. From CIOs and senior IT leaders in corporations and government
agencies, to business leaders in high-tech and telecom enterprises and
professional services firms, to supply chain and digital marketing
professionals and technology investors, Gartner is the valuable partner
to clients in 10,477 distinct enterprises. Through the resources of
Gartner Research, Consulting and Events, we work with clients to
research, analyze and interpret the business of IT within the context of
their individual roles. Gartner is headquartered in Stamford,
Connecticut, U.S.A., and as of June 30, 2016, had 8,338 associates,
including 1,830 research analysts and consultants, and we operate in
more than 90 countries. For more information, visit www.gartner.com.

Non-GAAP Financial Measures

Normalized EBITDA: Represents operating
income excluding stock-based compensation expense, depreciation and
amortization, accretion on obligations related to excess facilities, and
acquisition and integration charges. We believe Normalized EBITDA is an
important measure of our recurring operations as it excludes items that
may not be indicative of our core operating results. Investors are
cautioned that Normalized EBITDA is not a financial measure defined
under generally accepted accounting principles and as a result is
considered a non-GAAP financial measure. We provide this measure to
enhance the user’s overall understanding of the Company’s current
financial performance and the Company’s prospects for the future.
Normalized EBITDA should not be construed as an alternative to any other
measure of performance determined in accordance with generally accepted
accounting principles.

Diluted Earnings Per Share Excluding Acquisition
Adjustments:Represents GAAP diluted earnings per share
adjusted for the impact of certain items directly-related to
acquisitions. The adjustment items consist of the amortization of
identifiable intangibles, incremental acquisition and integration
charges such as legal, consulting, retention, severance and other costs,
and non-cash fair value adjustments on pre-acquisition deferred
revenues. We believe Diluted Earnings Per Share Excluding Acquisition
Adjustments is an important measure of our recurring operations as it
excludes items that may not be indicative of our core operating results.

Free Cash Flow: Represents cash
provided by operating activities plus cash acquisition and integration
payments less payments for capital expenditures. We believe that Free
Cash Flow is an important measure of the recurring cash generated by the
Company’s core operations that is available to be used to repurchase our
stock, repay debt obligations, invest in future growth through new
business development activities, or make acquisitions.

Safe Harbor Statement

Statements contained in this press release regarding the Company’s
growth and prospects, projected 2016 financial results and all other
statements in this release other than recitation of historical facts are
forward-looking statements (as defined in the Private Securities
Litigation Reform Act of 1995). Such forward-looking statements involve
known and unknown risks, uncertainties and other factors that may cause
actual results to be materially different. Such factors include, but are
not limited to, the following: our ability to maintain and expand our
products and services; our ability to expand or retain our customer
base; our ability to grow or sustain revenue from individual customers;
our ability to attract and retain a professional staff of research
analysts and consultants as well as experienced sales personnel upon
whom we are dependent; our ability to achieve and effectively manage
growth, including our ability to integrate acquisitions and consummate
future acquisitions; our ability to pay our debt; our ability to achieve
continued customer renewals and achieve new contract value, backlog and
deferred revenue growth in light of competitive pressures; our ability
to carry out our strategic initiatives and manage associated costs; our
ability to successfully compete with existing competitors and potential
new competitors; our ability to enforce or protect our intellectual
property rights; additional risks associated with international
operations including foreign currency fluctuations; the impact of
restructuring and other charges on our businesses and operations;
general economic conditions; risks associated with the creditworthiness
and budget cuts of governments and agencies; and other factors described
under “Risk Factors” contained in our Annual Report on Form 10-K for the
year ended December 31, 2015, which can be found on Gartner’s website at www.investor.gartner.com
and the SEC’s website at www.sec.gov.
Forward-looking statements included herein speak only as of the date
hereof and Gartner disclaims any obligation to revise or update such
statements to reflect events or circumstances after the date hereof or
to reflect the occurrence of unanticipated events or circumstances.

Total contract value represents the value attributable to all of our
subscription-related contracts. It is calculated as the annualized
value of all contracts in effect at a specific point in time,
without regard to the duration of the contract. Total contract value
primarily includes Research deliverables for which revenue is
recognized on a ratable basis, as well as other deliverables
(primarily Events tickets) for which revenue is recognized when the
deliverable is utilized.

(b)

In millions.

(c)

Research contract value represents the value attributable to all of
our subscription-related research products that recognize revenue on
a ratable basis. Contract value is calculated as the annualized
value of all subscription research contracts in effect at a specific
point in time, without regard to the duration of the contract.

The effective tax rates were 19% and 23% for the three and six
months ended June 30, 2016, and 34% and 35% for the three and six
months ended June 30, 2015. The adjustment effective rates declined
in the three and six months ended June 30, 2016 compared to the same
periods in 2015 because a larger percentage of the costs in 2016 had
no associated tax benefit.

(e)

The EPS is calculated based on 83.5 million shares for both the
three and six months ended June 30, 2016, and 84.3 million and 86.1
million shares for the three and six months ended June 30, 2015,
respectively.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Gartner's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.